Your financed a $30,500 kitchen renovation project with 4.75% add-on interest installment loan for 24 month. The loan required 15% down payment. Show your work for all parts of the problem. (a) What is the finance charge on the loan? (b) What are the monthly payments? (c) What annual percentage rate is being charged on the loan?
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Problem #2. Your financed a $30,500 kitchen renovation project with 4.75% add-on interest installment loan for 24 month. The loan required 15% down payment. Show your work for all parts of the problem.
(a) What is the finance charge on the loan?
(b) What are the monthly payments?
(c) What annual percentage rate is being charged on the loan?
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